Home » 2011 Issues » October 19, 2011 » DFS-42-11-00012-EP State Charter Advisory Board ("Board"): Selection of Candidates Representing Banking Institutions
DFS-42-11-00012-EP State Charter Advisory Board ("Board"): Selection of Candidates Representing Banking Institutions
10/19/11 N.Y. St. Reg. DFS-42-11-00012-EP
NEW YORK STATE REGISTER
VOLUME XXXIII, ISSUE 42
October 19, 2011
RULE MAKING ACTIVITIES
DEPARTMENT OF FINANCIAL SERVICES
EMERGENCY/PROPOSED RULE MAKING
NO HEARING(S) SCHEDULED
I.D No. DFS-42-11-00012-EP
Filing No. 893
Filing Date. Oct. 03, 2011
Effective Date. Oct. 03, 2011
State Charter Advisory Board ("Board"): Selection of Candidates Representing Banking Institutions
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Proposed Action:
Addition of Part 600 to Title 23 NYCRR.
Statutory authority:
Financial Services Law, section 205-b
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
Section 205-b of the Financial Services Law, Chapter 18-A of the Consolidated Laws, which establishes the State Charter Advisory Board (the "Board") within the Department of Financial Services, goes into effect on October 3, 2011. These regulations implement the statutory requirement that the Superintendent of Financial Services ("Superintendent") make rules to govern the method by which state chartered institutions may nominate persons to the Board and the process for selecting Board members.
In order to enable the Board to commence its activities, it is necessary that the process for nominating and selecting Board members be established as promptly as possible.
Subject:
State Charter Advisory Board ("Board"): selection of candidates representing banking institutions.
Purpose:
This rule implements section 205-b by providing a mechanism to nominate, select, and appoint Board members.
Text of emergency/proposed rule:
CHAPTER IV REGULATIONS OF THE SUPERINTENDENT OF FINANCIAL SERVICES
PART 600. STATE CHARTER ADVISORY BOARD: SELECTION OF CANDIDATES REPRESENTING BANKING INSTITUTIONS
(Statutory Authority - Financial Services Law § 205-b)
Section 600.1 Nomination procedure
The following procedure shall be followed in connection with the nomination of candidates for consideration by the Superintendent in appointing members of the State Charter Advisory Board (hereinafter the "Board") who represent banking institutions (each a "Bank Member"):
(a) Within 90 days after the provisions of the law creating the Board become effective, and at least 30 days prior to the expiration of the term of any Bank Member, and within 60 days after a vacancy has occurred for any reason other than expiration of term in the office of any Bank Member, the Department of Financial Services (the "Department") shall notify the institutions in the group or groups described in section 600.2 below in which such vacancy has occurred or will occur of the opportunity to nominate candidates to serve as the person representing such group. Such notice may be given by such means as the Superintendent deems appropriate, including publication in the bulletin of the Department.
(b) Upon the expiration of a period prescribed by the Superintendent, which shall be not less than 15 days nor more than 45 days from the date on which such nominations were first solicited, the names of the persons nominated shall be submitted to the Superintendent.
(c) No institution shall nominate more than one person for any vacancy.
(d) Notwithstanding the foregoing provisions of this section 600.1, no solicitation for nominations of candidates shall be required prior to the reappointment of a person who has served not more than one year as a member of the Board.
Section 600.2 Representation
Of the eight members of the Board representing banking institutions, one member shall represent institutions in each of the following groups:
Group One - Credit unions.
Group Two - Foreign banking corporations licensed to maintain a branch or an agency in this state.
Group Three - Banks, trust companies, private bankers, savings banks, and savings and loan associations (collectively, for purposes of this section 600 2, "Banks") having total assets of more than $3 billion as shown by the last periodical report of condition received by the Superintendent.
Group Four - Banks located in New York City or the Counties of Nassau, Suffolk, Sullivan, Westchester, Rockland, Putnam, Orange, Dutchess or Ulster, and having total assets of less than $500 million as shown by the last periodical report of condition received by the Superintendent.
Group Five - Banks, other than those in Group Four, having assets of less than $500 million as shown by the last periodical report of condition received by the Superintendent.
Group Six - Banks located in New York City and having total assets of $500 million to $3 billion as shown by the last periodical report of condition received by the Superintendent.
Group Seven -- Banks located in the Counties of Nassau, Suffolk, Rockland, Westchester, Orange, Putnam, Sullivan, Ulster, Dutchess, Delaware, Greene, Columbia, Otsego, Schoharie, Albany, Rensselaer, Herkimer, Montgomery, Schenectady, Fulton, Saratoga, Washington, Warren, Hamilton, Essex, Clinton, Franklin, or St. Lawrence, and having total assets of $500 million to $3 billion as shown by the last periodical report of condition received by the Superintendent.
Group Eight -- Banks, other than those in Group Six and Group Seven, having total assets of $500 million to $3 billion as shown by the last periodical report of condition received by the Superintendent.
Section 600.3 Appointment of Members
Members of the Board shall be selected by the Superintendent in his or her sole discretion. In selecting members, the Superintendent will give due consideration to persons nominated in accordance with section 600.1, the extent to which the Bank Members of the Board reflect a range of size and geographical location, and the other factors set forth in Section 205-b of the Financial Services Law.
This notice is intended:
to serve as both a notice of emergency adoption and a notice of proposed rule making. The emergency rule will expire December 31, 2011.
Text of rule and any required statements and analyses may be obtained from:
Sam L. Abram, Department of Financial Services, One State Street, New York, NY 10004, (212) 709-1658, email: SAM.ABRAM@DFS.NY.GOV
Data, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
45 days after publication of this notice.
This action was not under consideration at the time this agency's regulatory agenda was submitted.
Regulatory Impact Statement
1. Statutory Authority:
Section 205-b of the Financial Services Law ("FSL") creates the State Charter Advisory Board ("Board") and provides that it shall have nine members, who shall be appointed by the Superintendent of Financial Services ("Superintendent"). The membership shall consist of one representative of consumers, one representative of credit unions, one representative of foreign banks, and representatives of banks which, to the extent practicable, reflect a range of size and geographical location. Of those representatives, at least one shall represent institutions of more than $3 billion in assets and at least two shall represent institutions with less than $500 million in assets.
Section 205-b further provides that the Superintendent shall make rules governing the method by which state chartered institutions may nominate persons to the Board and the process for selecting such members, provided that the representative of consumers is selected by the Superintendent.
2. Legislative Objectives:
The regulation implements the statutory directive that the Superintendent make rules governing the method by which state chartered institutions may nominate persons to the Board and that the representatives of banks reflect, to the extent practicable, a range of size and geographical location.
3. Needs and Benefits:
The regulation implements the statutory directive in Section 205-b of the FSL by providing mechanisms for nominating and selecting members of the Board.
Consistent with the language of the statue, the regulation provides for one representative for banking institutions (including banks, trust companies, private bankers, savings banks and savings and loan associations) with over $3 billion in assets ("large banks"), two representatives for banking institutions with under $500 million in assets ("small banks"), and three representatives for banking institutions with assets between $500 million and $3 billion ("intermediate banks").
Pursuant to the statute's mandate that the members representing banking institutions reflect, to the extent practicable, a range of size and geographic location, the regulation divides the state into two geographically contiguous areas containing roughly equal numbers of small banks for the purpose of appointing representatives of small banks, and three geographically contiguous areas containing roughly equal numbers of intermediate banks for the purpose of appointing representatives of intermediate banks.
4. Costs:
The regulation is not expected to impose any costs upon regulated persons. The costs incurred by the Department of Financial Services in implementing the nominating procedure are expected to be insignificant, and are in any case mandated by FSL Section 205-b.
5. Local Government Mandates:
The rule making will not impose any program, service, duty or responsibility upon any county, city, town, village, school district, fire district or other special district.
6. Paperwork:
The regulation will not require any new forms, reporting or other paperwork by regulated entities.
7. Duplication:
The regulation will not result in duplication, overlap or conflict with any rules or other legal requirements of the state and federal governments. The Board is being created under the FSL, a new state law.
8. Alternatives:
Other possible groupings of state chartered banking institutions that would meet the representational requirements of Section 205-b were considered. However, it is believed that the groupings set forth in the regulation best meet the objective of providing representation that is consistent with the statutorily specified groupings.
9. Federal Standards:
There are no federal standards for this or similar subject areas. The Board is being created under the FSL, a new state law.
10. Compliance Schedule:
The provisions of the FSL creating the Department of Financial Services, including those creating the Board, are expected to become effective on or shortly after October 3, 2011. It is anticipated that following the adoption of the regulation, the DFS will act promptly to implement the nomination procedure contained therein.
Regulatory Flexibility Analysis
A Regulatory Flexibility Analysis for Small Business and Local Governments is not submitted with this notice because it is apparent from the nature and purpose of this rule that it will have no adverse economic impact, and will not impose any reporting, recordkeeping or other compliance requirements, on small businesses and local governments. In fact, the rulemaking, which sets out the process by which uncompensated State Charter Advisory Board members will be nominated, selected, and appointed, provides substantial representation on the State Charter Advisory Board for smaller banks.
Rural Area Flexibility Analysis
A Rural Area Flexibility Analysis is not submitted with this notice because it is apparent from the nature and purpose of the rule that it will not have any adverse economic impact or impose any reporting, recordkeeping or other compliance requirements on public or private entities in rural areas. In fact, the rulemaking, which sets out the process by which uncompensated State Charter Advisory Board members will be nominated, selected, and appointed, provides substantial representation on the State Charter Advisory Board to smaller banks, which may include banks in rural areas.
Job Impact Statement
A Job Impact Statement is not submitted with this notice because it is apparent from the nature and purpose of this rule that it will not have any adverse impact on jobs and employment opportunities. The rulemaking merely sets out the process by which uncompensated State Charter Advisory Board members will be nominated, selected, and appointed.
